Latest news with #MikeLynch
Telegraph
6 hours ago
- Business
- Telegraph
How Mike Lynch shielded his family fortune from £700m fraud ruling
After winning his freedom last year, Mike Lynch was relaxed about the prospect that he might become personally penniless. The British software tycoon had faced the prospect of decades in prison before he defeated criminal fraud charges in a San Francisco trial, and described winning the case as being granted a 'second life'. The prospect of signing his wealth away to Hewlett-Packard (HP), the tech giant that was pursuing him for billions in the English courts, paled in comparison to ending his life behind bars. But Lynch was breezy about the prospect for another reason: a large portion of the Lynch family fortune was held in his wife Angela Bacares's name, shielding it from any legal repercussions. 'My wife has been very good at investing in the things that I've told her to from a point of view of technology. We've done very well,' Lynch said in an interview after he was acquitted. 'It's not a perilous situation.' Just a few weeks later, Lynch and his daughter Hannah died when the entrepreneur's superyacht, Bayesian, capsized off the coast of Sicily, a tragedy that Bacares herself survived. But the decision for Bacares to hold much of the wealth in her name now looks like a wise move. On Tuesday, a judge ruled that HP was owed almost £740m from Lynch and his business partner Sushovan Hussain over the fraudulent sale of their software giant Autonomy 14 years ago. With Mr Hussain having settled privately, Lynch's estate is on the hook for the majority of the damages. Valued by lawyers at $450m (£333m) during his US trial, the fortune in Lynch's estate would be wiped out by the judgment. An appeal by Lynch's legal team is likely. But even if the estate is bankrupted, Bacares is sitting on a fortune worth hundreds of millions owing to the way the pair divided the proceeds of Lynch's endeavours. American-born Bacares, 58, worked on Wall Street and the City of London before her and Lynch were engaged in 2001 and married the following year. She has not made any public comments since her husband's death, beyond a brief message from the Lynch family stating they are 'devastated'. But her name has featured regularly in stock market filings, company records and court documents. While Lynch made around £500m from selling Autonomy, Bacares, who was occasionally an employee at the company, sold £15.6m of shares. By the time Lynch's next venture, cybersecurity company Darktrace, made it to the public markets, Ms Bacares was the dominant shareholder. She owned 12.8pc of the company at the time of its London flotation, compared to a 4.9pc stake owned by Lynch. Bacares and Lynch had both sold the majority of their stakes by the time Darktrace was bought by private equity firm Thoma Bravo for $5.3bn last year – netting hundreds of millions of pounds. She is also one of the biggest shareholders in Luminance, a legal AI company backed by Lynch's venture capital firm, that has raised more than $115m. Company filings also show her listed as a director at Bunhill Partners, a now defunct algorithmic trading. The couple's personal assets were also held in her name, including Loudham Hall, the Suffolk estate where they lived, and Bayesian itself. The superyacht, raised only last month, was owned by Revtom Limited, of which Bacares was the only shareholder. This may now present its own legal complications. Families of those who perished on Bayesian, including cook Recaldo Thomas and Lynch's lawyer, Chris Morvillo, are seeking compensation from the insurance company that covered the vessel. Hewlett-Packard, now known as HPE, could also theoretically pursue Bacares if there is a shortfall from the fraud case, although the optics of going after his widow would be questionable. Even if Lynch's estate is wiped out, his family are likely to be well looked after.
The Hindu
9 hours ago
- Business
- The Hindu
UK court awards £700 million to HP in late tycoon's fraud case
A UK court Tuesday awarded £700 million ($946 million) compensation to IT firm Hewlett Packard in a fraud case involving late British tech tycoon Mike Lynch, killed last year when his superyacht sank off Sicily. A UK court ruled in 2022 in favour of the U.S. technology giant, now known as Hewlett Packard Enterprise (HPE), in a civil case linked to the sale of Lynch's company, Autonomy. Lynch, once dubbed the "British Bill Gates", founded software firm Autonomy in the 1990s. Its $11 billion sale to Hewlett Packard in 2011 also saw him face fraud charges in the United States. HP accused Autonomy of artificially inflating its revenues and growth before the sale and had demanded $5 billion in compensation. "We are pleased that this decision brings us a step closer to the resolution of this dispute," said a spokesperson for Hewlett Packard. "We look forward to the further hearing at which the final amount of HPE's damages will be determined," they added. The further hearing, dealing with matters including interest, currency conversion and whether Lynch's estate can appeal the decision, is scheduled for November. The British court had not yet awarded damages when Lynch was killed along with his 18-year-old daughter Hannah, four friends and the yacht's cook in the sinking of his British-flagged vessel Bayesian in a storm in August 2024. Lynch, 59, his family and guests were on board celebrating his acquittal in the massive U.S. fraud case. The 56-metre (185-foot) yacht was struck by a mini-tornado before dawn as it was anchored off Porticello, near Palermo. Hewlett Packard had recorded nearly $9 billion in write-downs, including more than $5 billion it claimed resulted from accounting manipulations by Autonomy's directors before the sale. But justice Robert Hildyard in the British case wrote in his ruling that "HP's claim was always substantially exaggerated". The initial compensation award had been expected in September 2024, and before his sudden death Lynch had prepared a written reaction to the judgement. The ruling "exposes HP's failure and makes clear that the immense damage to Autonomy was down to HP's own errors and actions", he wrote, adding that the company would consider appealing the decision. A spokesman told AFP any debts would have to be discharged from Lynch's estate.
Times
13 hours ago
- Business
- Times
Mike Lynch's estate faces bankruptcy over £700m court order
Mike Lynch's estate looks likely to be wiped out after a High Court judge ordered it to pay more than £700 million in damages to Hewlett Packard Enterprise in one of the UK's biggest corporate fraud cases. Mr Justice Hildyard ruled in 2022 that Lynch had defrauded Hewlett Packard Enterprise (HPE) over the US tech giant's $11.7 billion (£8.7 billion) acquisition of his business software company, Autonomy, in 2011. On Tuesday morning, almost a year since the technology entrepreneur's superyacht sank off the coast of Sicily while he was celebrating his acquittal in a US criminal trial, Hildyard announced he had awarded HPE damages totalling about £730 million. The final figure could end up being substantially higher once interest is factored in after a final hearing scheduled for November. Lynch's family indicated they would consider appealing against the ruling. Hildyard concluded that had Autonomy's accounts been properly stated, HP and Autonomy would have probably struck a deal that valued each Autonomy share at £23 rather than the £25.50 that it paid. The Silicon Valley company had demanded $4 billion, far more than the $516 million that Lynch, who was 59 when he died last August, was estimated to have earned from the takeover. Hildyard said that HPE's claim 'was always substantially exaggerated'. In a statement written by Lynch before his death, the tech tycoon said the ruling confirmed that HPE's original claim was 'not just a wild overstatement . . . but it was off the mark by 80 per cent'. He added: 'Today's judgment is a view that Autonomy's actual value was not even 10 per cent below the price HP paid. This result exposes HP's failure and makes clear that the immense damage to Autonomy was down to HP's own errors and actions.' A spokesman for HPE said: 'We are pleased that this decision brings us a step closer to the resolution of this dispute. We look forward to the further hearing at which the final amount of HPE's damages will be determined.' The damages will be paid for out of Lynch's estate. In the latest Sunday Times Rich List, the Lynch family's assets were valued at £473 million. Many assets are in the name of Angela Bacares, his widow, including Loudham Hall, their Suffolk estate, and shares in the cybersecurity business Lynch backed called Darktrace, which were sold for more than $300 million last year. If HP can prove these assets were really his, they could be targeted. HPE bought Autonomy, a pioneer in 'big data' analytics founded by Lynch in 1996, in 2011. Within months of the deal's completion, HPE claimed that Lynch and his finance chief, Sushovan Hussain, had used accounting tricks to make Autonomy appear far bigger, and financially healthier, than it was. The sale sparked more than a decade of costly litigation and investigations. In 2018, Hussain was convicted of fraud in the US and sentenced to five years in prison. He was released in January 2024 and settled with HPE in this case for an undisclosed sum earlier this year. In 2021, the Financial Reporting Council, the UK's accounting watchdog, fined Deloitte £15 million for 'serious failures' over its audit of Autonomy's accounts. After a long extradition battle, Lynch was sent to the US in 2023 to face a jury in California, but he was acquitted, along with Stephen Chamberlain, Autonomy's vice-president of finance, last June, shortly before the yacht accident in August. According to an interim report from British marine investigators, at about 4am on August 19 last year while the Bayesian was anchored off the town of Porticello, the 56m (184ft) boat was violently knocked sideways by a sudden 80mph gust. Water suddenly started cascading in and Bacares was pulled out of the vessel by a crew member. Others however, including Lynch and their 18-year-old daughter, Hannah, never made it out of the boat as it sank 45m to the sea bed. The conclusion of the UK legal proceedings has been in limbo since the maritime tragedy. Although HPE wanted $4 billion, few thought it would get that much. Hildyard said in his original findings that the US company was unlikely to get the sum it was after, because HP may well have bought Autonomy, regardless of the fraud.
Business Recorder
13 hours ago
- Business
- Business Recorder
UK court awards £700m to HP in late tycoon's fraud case
LONDON: A UK court Tuesday awarded £700 million ($946 million) compensation to IT firm Hewlett Packard in a fraud case involving late British tech tycoon Mike Lynch, killed last year when his superyacht sank off Sicily. A UK court ruled in 2022 in favour of the US technology giant, now known as HPE, in a civil case linked to the sale of Lynch's company, Autonomy. Lynch, once dubbed the 'British Bill Gates', founded software firm Autonomy in the 1990s. Its $11 billion sale to Hewlett Packard in 2011 also saw him face fraud charges in the United States. HP accused Autonomy of artificially inflating its revenues and growth before the sale. Hewlett Packard had demanded $5 billion in compensation. The company did not reply to an AFP request for comment. The British court had not yet awarded damages when Lynch was killed along with his 18-year-old daughter Hannah, four friends and the yacht's cook in the sinking of his British-flagged vessel Bayesian in a storm in August 2024. Lynch, 59, his family and guests were on board celebrating his acquittal in the massive US fraud case. The 56-metre (185-foot) yacht was struck by a mini-tornado before dawn as it was anchored off Porticello, near Palermo. Hewlett Packard had recorded nearly $9 billion in write-downs, including more than $5 billion it claimed resulted from accounting manipulations by Autonomy's directors before the sale. But justice Robert Hildyard in the British case wrote in his ruling that 'HP's claim was always substantially exaggerated'. The initial compensation award had been expected in September 2024, and before his sudden death Lynch had prepared a written reaction to the judgement.
Yahoo
16 hours ago
- Business
- Yahoo
$11 Billion Deal, A Billion-Dollar Blow, and a Death at Sea -- The HPE-Autonomy Saga Isn't Over Yet
Hewlett Packard Enterprise (NYSE:HPE) is inching toward closure in a saga that's dragged on for over a decade. A London judge has ruled HPE is entitled to around $985 million after its ill-fated $11 billion acquisition of Autonomy, led by British tech entrepreneur Mike Lynch. That's a steep haircut from the original $4 billion claimbut still a win for HPE shareholders, who the company said it had a fiduciary duty to pursue. The decision lands less than a year after Lynch died in a freak yacht accident off the Sicilian coast, just weeks after beating criminal charges in the U.S. Warning! GuruFocus has detected 5 Warning Sign with HPE. The ruling caps one of the U.K.'s highest-profile corporate disputes in years. Judge Robert Hildyardwho previously found Lynch and Autonomy's CFO liable for fraudsaid HPE's damages estimate had been substantially exaggerated. In his view, there was more than a grain of truth to Lynch's rebuttal that HP overstated the numbers when it claimed it was defrauded by as much as $5 billion. In a posthumous statement prepared before his death, Lynch said the real damage came from HP's mismanagement, not fraud. What happens next? The case now shifts to Lynch's estate, which could be liable for most of the damages. His legal team is weighing an appeal. But for investors, the broader takeaway is this: HPE's Autonomy deal remains a cautionary tale in due diligence riskand how bad M&A decisions can spiral into years of courtroom drama. A final damages hearing is still to come, but this week's decision marks a rare moment of progress in a case that's been anything but predictable. This article first appeared on GuruFocus. Sign in to access your portfolio
